This is usually the time of year when people start digging through their file, or shoe box as the case may be, in an effort to get started on their dreaded Form 1040. If you wait until the eve of tax day, then you’ll find yourself furiously rifling through said shoe box. And if you really use a shoe box to secure your important records, then chances are you not very organized, and you have other records scattered all throughout the house or in multiple files on your computer.
I know that nobody ever taught you about income taxes or finances in grade school; my kids haven’t had that class yet either. But as they get older, I do intend to impart some wisdom on them, even if by force. And for now, there are many habits I can help them develop that will hopefully carry over into their adult life and will make their future April 15ths that much more bearable.
1. “Get started on your homework right after school.” If you at least begin the process with a few weeks to spare, then when things come up that inevitably pull you away from the task at hand, you will still have time to put out those fires and get your return filed on time. And, if due to your personal high principles, you refuse to pay Uncle Sam a nickle before the 15th, at least have it ready to go, then you can hit “send” at 11:59pm.
2. “Keep everything in your backpack.” It really doesn’t matter if you’re using a shoe box for your tax docs. A shoe box works just fine if all your stuff fits in there. One disorganized shoe box is way better than having multiple piles around the house. The key is to keep everything together.
3. “Once it has been graded, throw it out.” Sometimes we want to save a particularly well-made craft or an A+ essay, but most of the stuff that comes home from school each day goes directly into the trash. We couldn’t possibly save everything, nor would we want to. Same with your tax records. If you can access it online, then why keep a paper copy? The “three-year rule” should generally suit you just fine.